Costs of Health Care Case Paper

Costs of Health Care Case Paper

Rising health care costs has become a concern for many nations, societies and even individuals. The ability to cope with this issue and its implications will be greatly looked into in this report. In order to understand how to tackle this challenge, there is a need to first understand the root causes, in other words, what causes health care costs to rise. After having looked at some of the common beliefs of rising health care costs, the report will then look at the strategies implemented to tackle this challenge. To do so, the report will make use of a few journal articles to critically discuss on the effectiveness of Singapore’s healthcare financing system and recommend measures that will help solve the issue better. Costs of Health Care Case Paper

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Literature Review

A very common and simple reason that people give for the increase in healthcare costs often fall on the fact of aging population and the increased vulnerability of the population to health issues, leading to more medical consultations, both inpatient and outpatient. This in turn, causing healthcare costs to rise. Another common reason that many people give for the increase in healthcare costs is inflation. Inflation causes the prices of goods and services to rise. When such happens, the costs of health care will rise because the salary of the workforce employed in the healthcare industry increases, the costs of medication increases and the costs of health insurance increases, for example. (Cockerham, 2010) Costs of Health Care Case Paper

The Organization for Economic Co-operation and Development noted a significant increase of average ratio of health spending to GDP in its 31 member countries. The report also suggested that while technological advancement brought about improvement in diagnosis and treatment, this also contributed to the increasing of health spending (OECD Health Data 2010, 2010).

In another report, rising health care costs was attributed to greater use of innovative medical technologies. However, the report suggested that rising health care costs could also be due to the market power of health care providers. In the report, however, it seemed to suggest that the extent of the increase in rising health care costs in developed countries like the United States in terms of the market power of health care providers are more significant than that in developing countries. (Annals of Internal Medicine, 2005)

It is undeniable that no country is able to guarantee accessible healthcare for all. However, the situation in low-income countries is far more critical as some are even unable to ensure access to basic healthcare for its citizens. A few options proposed to tackle this issue include governments increasing their budget allocations on health expenditure, raising additional domestic funds for health or diversifying their funding sources (World Health Organization, 2011). Costs of Health Care Case Paper

Another interesting cause highlighted for the increase in rising health care costs could be due to our social behaviour in terms of financial prudence when a third party pays our medical bills. It is interesting to note that when our medical bills payment falls on the responsibilities of a third party (i.e. employer, insurance company or government) and we only pay a small and affordable percentage, we are more likely to seek medical consultation, diagnosis and treatment even for the slightest illness.

A case study on Singapore health care financing system is done to discuss on how these considerations are managed and how it may be further improved.

Case study: Singapore health care system financing

According to one of the research studies, Singapore’s ageing population which is estimated to increase by 12% in 2030 to 19% of its population being made up of older Singaporeans aged 65 and above. This is of a concern in ensuring provision of affordable healthcare especially where responsibility of the healthcare bill often falls on the children of this segment of the society.

Singapore’s health care system focuses on developing independence and interdependence of its people on the nation. In order not to create total reliance and dependence on the nation, “Singapore’s health care system begins with building a healthy population through preventive healthcare program mes and promoting a healthy lifestyle (Ministry of Health, Singapore, 2007)”.

Singapore’s health care system then ensures affordability of healthcare to its people through offering universal coverage and multiple layers of protection. In this strategy, this is done through (1) “heavy government subsidies of up to 80% of the total bill in acute public hospital wards, which all Singaporeans can access”, (2) “, a compulsory individual medical savings account scheme which allows practically all Singaporeans to pay for their share of medical treatment without financial difficulty”, (3) “Medishield, a low cost catastrophic medical insurance scheme, which allows Singaporeans to effectively risk-pool the financial risks of major illnesses. Individual responsibility for one’s healthcare needs is promoted through the features of deductibles and co-payment in Medishield. Elder shield, a severe disability insurance, is also available for subscription by Singaporeans to risk-pool against financial risks of suffering a severe disability.” and (4) “Medifund, which is a medical endowment fund set up by the Government to act as the ultimate safety net for needy Singaporeans who cannot afford to pay their medical bills despite heavy subsidies, Medisave and Medishield” (Ministry of Health, Singapore, 2007).

To promote competition and transparency so as to counter further unwarranted rise in healthcare costs, “in 2004, the Ministry of Health began to publish hospital bill sizes to show the variation in costs among our hospitals, with a view to push our hospitals on this effort to “do more with less”. There have been some successes since then in spurring improvements, e.g. LASIK prices dropped by more than S$1,000 per eye and the competitive price wars continue to this day, at great benefit to consumers. The Ministry has also progressively published health outcomes on the website to encourage further improvements and help patients make more informed choices.” Singapore’s success was further supported by its statistics on government spending in 2008, when “Singapore spent about S$ 10.2 billion or 3.9% of GDP on healthcare. Out of this the Government expended S$2.7 billion or 1.0% of GDP on health services” (Ministry of Health, Singapore, 2007). Costs of Health Care Case Paper

Discussion: Effectiveness of Singapore’s strategies in managing rising health care costs

Singapore’s focus on the ideology that prevention is better than cure helps managing rising health care costs by encouraging its population to reduce the need of seeking medical attention and thus reducing substantially incurring of such expenditure. Its preventive healthcare program mes such as free or subsidized community health screening program mes and activities aimed at promoting active living and healthy lifestyle makes being healthy a simple way of life which is possible to achieve. Moreover, this ideology will continue to tackle the lasting problem of aging population and the increased vulnerability of the population to health issues, which is said to be a cause for rising health care costs.

With stressors of a fast-paced meritocratic society such as stress at school at a very young age, stress of work upon working life and the stress of supporting and maintaining a family, this often causes one to become sick and have to turn to medical attention for relief. As such, Singapore would need to consider strategies on how to tackle such non-health issues that may lead to healthcare expenditure, in order to further assist its population to manage rising health care costs. Costs of Health Care Case Paper

Next, having discussed the preventive strategy taken by Singapore, the Medisave and Medifund benefits would be discussed. It is important to first understand that only Singapore Citizens and Singapore Permanent Residents contributing to the Central Provident Fund (CPF) as well as his dependents (i.e. spouse, children, parents and grandparents) would be able to benefit from the Medisave.

In addition to subsidizing healthcare expenditure, the Medisave can also be used to pay the premiums of MediShield, which covers up to 80% of a large medical bill at the class B2/C level or any appropriate integrated shield plans from approved private insurers (Ministry of Health, Singapore, 2007). This allows the individual and his dependents who are subscribed to the MediShield or the integrated shield plans to have the most, if not all, of the inpatient and outpatient healthcare expenses, including co-insurance and deductible to be taken care and omits the individual’s stress of having the need to seek sufficient cash funding for such a purpose. This in turn, helps to minimize the social stressors of healthcare need.

While this may prove to be helpful to its population, it is important to note that as the benefits is still fairly limited. Compared to its entire population being able to benefit from such initiatives, there is a burden created on the CPD-contributing individual to look after both his personal and dependents healthcare needs and expenditure, using the Medisave. Should the CPD-contributing individual be the sole breadwinner of the household, this would inevitably create further psycho-social stressors on him which may pose potentially cause health deterioration and create unwarranted expenditure on healthcare needs. Therefore, Singapore would need to re look into providing healthcare financial subsidies to its population who are do not contribute to the CPF, in order for its approach to manage rising healthcare costs to be effective and complete.

On top of the Medisave, the Medifund scheme exists to help ensure needy Singapore citizens who are unable to pay for their medical bills, are still provided with the necessary medical care. In order to benefit from the Medifund, a list of basic requirements needs to be met, such as the patient and his family having difficulty affording the medical bill despite heavy government subsidies, MediShield and Medisave (Ministry of Health, Singapore, 2007). While the Medifund scheme shows the government great concern and active efforts to ensuring medical care is catered to the needy of its population, the initiative is still not wholesome and thus need to be re looked into, such as in a situation where a patient meets most of the criteria stated but comes from a broken family and has a family member who is able but refuse to pay for the patient’s medical bill, he may then be unable to benefit from the Medifund. In such an instance, further implications and repercussions to the patient’s psychological and physical health may worsen his existing medical condition. Not only will his medical bill continue to snowball, his physical health problems may continue to deteriorate as well. Costs of Health Care Case Paper

Indeed, Singapore’s strategies in managing rising health care costs through its present healthcare system seem comprehensive and complete. However, there are still some areas that Singapore would need to re-look and focus on in order that the strategies would be effective for its population. With the known fact that change is the only constant, a review system would thus need to be in place to improve strategies implemented to manage rising health care costs effectively.

A recommended approach for Singapore to review and implement more wholesome, comprehensive and effective strategies to managing rising health care costs may be that of implementing differential healthcare financing schemes that would assist the various sociology-economic segments of its population.

Secondly, as rising health care costs due to inflation has yet to be tackled by its current strategies, Singapore may need to review its employment assistance and salary compensation strategies to better assist its population in managing rising health care costs, such as ensuring its population who are unemployed to be able to seek employment or reemployment within a short time frame as well as ensuring that the salary compensation for each occupation or profession would be appropriately accorded based on skills, abilities, experience, performance as well as inflation.

Conclusion

The Singapore government should not micromanage the issue of rising healthcare costs by superficially managing direct influence on rising healthcare costs. Costs of Health Care Case Paper

Today more than ever we are being faced with the problem of our Health Care system. Currently the United States spends 1.6 trillion dollars on healthcare. That amounts to 15% of our GDP. To look at it in perspective that's almost double what the country spends on information technology. Within the decade, estimates claim health care costs could rise as high as 3 trillion dollars. According to the Labor Department's consumer expenditure survey, US residents in 2002 spent $2,350 on medical expenses, which is 4.8% of annual household income. There are many underlying reasons for these high costs. The problem then becomes what do we do about it, and how does it affect the future growth and development of the economy (Healthcare Financial Management). Some of the major reasons for rises in the healthcare system are an aging population, high administrative costs, overuse, technology, prescription drugs, uninsured, shifting of costs by the government, malpractice suits, lifestyle choices, and inflation. The "baby boomer" generation as we know it is getting older. In addition to that people's life expectancy rate is on the rise, which means the health care system has to cover people longer. As these people get older, they tend to require more medical care. In one study they found a 64-year-old individual requires nearly $4,500 more per year in health care services than an 18-year-old. Excessive costs come from administrative and paperwork costs. The reason these costs are so high is because of the third-party relationship. Most of the country is insured under private insurance companies. Third-party payers are trying to control costs by closely monitoring the behavior of doctors and patients. This is found to be excessive because these cost-containment activities have not contained costs very well at all. (Tillmar, 2003)

Medical bills are one of the most significant financial burdens facing Kenyans in this modern era. This is partly due to the nature of the health care system in Kenya. Every year, thousands of Kenyans are pushed below the national poverty line due to direct medical bills. This has led to a more significant concern that most Kenyans are only an illness away from poverty. Costs of Health Care Case Paper

Only a small percentage of Kenyans have medical insurance, the massive awareness and consumer education by NHIF notwithstanding.

Here’s how best one can manage their health care costs:

  • Understanding that the medical insurance card is not a credit card

Some if not most medical insurance card holders misuse their cards by viewing it as more of a credit card. There are simple ailments that in one way or another, only need over the counter drugs, or home therapy, but one would shun that idea as ineffective and go to the hospital and end up paying a higher fee than what you could have paid over the counter. Such dependencies are contributing factors inflating insurance premiums.

  • Seeking the second opinion

In the event that one is diagnosed with a particular ailment, it is imperative to get a second opinion from different doctors before eventually beginning your treatment program. This allows one to affirm the first doctor’s opinion and reduces instances of misdiagnosis.

  • Make good use of the NHIF enhanced benefit

In the recent past the basic NHIF benefits were enhanced to cater for surgical cases, CT Scans, MRI, dialysis and chemotherapy treatment. The attending doctor fill a form and shares to NHIF offices for approval. This packages are greatly reducing costs since it is cost shared with your Insurance Company and curbs early depletion of limit.

  • Good choice of a health facility

Most of Kenyan medical facilities are in business and are out to make good money from your insurance cover. They escalate costs to be settled via Insurance compared to cash payers.

The costs varies from one facility to another depending on hospital tiers but the attending Doctors are same who rotate. Do not choose a facility due to the name, choose what you can afford even without insurance.

  • Consider using generic drugs

Most people perceive these drugs as inferior to the original brand named versions. They are created to be the same as already existing brand of medicine form of dosage, safety, strength, administration route, quality, performance characteristics and intention of use. They work just the same as existing brands but with cheaper price tags. Use of generic drugs is something we should consider as a country in a bid to lower healthcare costs and costs of medication. Costs of Health Care Case Paper

  • Lifestyle change

Some of the chronic diseases in the modern day are as a result of poor lifestyle habits. Leading a healthy lifestyle can prevent one from regular health facility visits that come as a result of. Many people are always oblivious of how staying physically active or even watching their diet could do to their health.

The biggest issue for health care today is that there's limited transparency into the cost or quality of care. If we know that an insurance premium — whether it's for auto, home or health — is built primarily off the cost of claims, then it seems obvious that the objective is to reduce the amount of fender-benders, basement water damage and costly medical treatments.

The Healthcare Cost Institute outlined that health-care spending is up. Way up. That's because prices are up for treatments, doctor visits and prescription drugs, while usage has remained flat or going down in many instances. If you look across the world in terms of industrialized countries, the United States has the highest prices for health care by far, and not nearly the best quality. So we have a problem, and it's crushing consumers.

That problem is driven by a complete lack of transparency, particularly on the price side. So it's imperative to talk about prices.

Over the past nine years, employee out-of-pocket spending for a family of four increased 69 percent in the form of higher co-pays and higher deductibles, along with 105 percent employee premium contribution growth. Over the same period, employer premium contributions increased 62 percent.

In 2008 more than 8 percent of a family's income was spent on health care. In 2015 (last available data) it rose to 12 percent. This means people are making less money today as a direct result of the cost of health care.

Here are four ways to slash the cost of health care in America — that health insurance companies don't want you to know about.

1. Control the claims and per-unit cost

By refocusing employers on the destination, it's much easier to overcome the perceived issues of the journey. The bigger message to challenge employers and their employees is that health-care costs are a simple function of frequency of claims multiplied by the unit cost of those claims. The item that many people continue to struggle with as it relates to their health insurance are the premiums (fully insured or stop loss for self-insured) derived from the claims and per unit cost. Control these two items and you finally control the health-care expense. Yet misaligned incentives dictate that not one entity that's charged with 'controlling the health insurance premium are talking about these two items — not the health insurance carriers, not the traditional broker/consultant and not the pharmacy benefit manager. Costs of Health Care Case Paper

The Employee Benefit Research Institute highlights that more than 150 million consumers obtain health insurance coverage through their employers, almost 60 million of them on a fully insured plan, where a company pays a monthly premium for its health insurance. The balance is covered under a self-insured plan, where the company pays the employee's health claims directly.

If the fully insured carrier lowers the company's claim costs due to the Medical Loss Ratio requirement that is part of the Affordable Care Act, the carrier would have to lower their premiums next year and/or offer premium rebates, which would upset shareholders and upper management, whose main job is to drive premium growth. Since most health insurance brokers get paid a commission based on a percentage of the premium paid, most brokers have a financial incentive to allow the premium to increase and therefore the underlying claims. The higher the health-care spend, the more money made by the parties surrounding the health plan.

2. Shop for lower-cost care

Focusing on frequency and per-unit cost is a function of managing the health-care supply chain. This paradigm shift is available for any group that chooses to pursue a self-funded or level-funded (self-insurance with stop-loss built in, then divided into 12 equal monthly installments to feel like a budge table premium) arrangement, as employers pay only for the health claims their people consume. By managing the supply chain — which is the actual cost of the items utilized, like office visits, surgeries, imaging, hospitals and prescription drugs — consumers can pay attention to the cost and quality of each unit of health care by shopping around, using readily accessible online tools, then collectively are able to lower costs together and improve the predictability of outcomes.

3. Take advantage of medicine

Medicine allows doctors to evaluate, diagnose and often prescribe patients at a distance by phone, email, text or video. The approach has been through a striking evolution in the last decade, and it is becoming an increasingly important part of the American health-care infrastructure. Net cost savings for these remote consultations is around $200 per visit.

4. Pay attention to incentives

If employees are armed with education and the information they need, coupled with incentives, like waived deductibles or co-pays to drive action, the rewards are lower employee contributions or, in some cases, no employee contributions, along with profitability increases for employers. Reduce the health-care costs and you reduce the health insurance costs for all.

In 2013, 56 million people struggled to pay health care related costs. That's one out of five American adults. Of those, 10 million had health insurance to cover most of the costs. But they couldn't meet the deductibles that average between $5,000 and $10,000 a year. That's because the average household income is $59,019.

Most people paid the bills as they could, over time. But 16.5 percent took longer than a year to pay them off. Another 8.9 percent just couldn’t pay them at all. Costs of Health Care Case Paper

Consequences of High Health Care Costs

Of those who had trouble paying their medical bills, 73 percent skimped on groceries, clothing or rent. Sixty percent used up their savings. More than 40 percent took on extra work to pay the bills.

Almost one in four cut back on taking their prescription medications. For example, one person couldn't pay the $1,200 a month for her insulin. She reduced the dose, and her diabetes got worse. About 30 percent postponed getting follow-up care. That leads to further health problems down the road.

Rising health care costs forced 34 percent to rack up high-interest credit card debt. Fifteen percent took out other loans, while 13 percent borrowed from a payday lender.

These families were not the poor, who are usually well-covered by Medicaid. Instead, two-thirds were homeowners and three-fifths were college graduates. They were middle-class Americans who got hit with massive, and unexpected, out-of-pocket medical expenses. Those with private insurance saw an average of $17,749 per family. Those who lost insurance during the process faced $22,658 in bills. Those without insurance obviously were hit with the most, at $26,971 per family.

No. 1 Cause of Bankruptcy?

In 2015, the Kaiser Family Foundation found that there were 1 million adults who declared medical bankruptcy. That is more than those going bankrupt for unpaid credit card debt or mortgage defaults. A 2013 Nerd wallet study found that almost 30 percent maxed out their credit cards, while 8 percent were forced into bankruptcy because the illness cost them their jobs.

Even more disturbing was that 78 percent of them had health insurance that failed to cover all their bills. Sixty percent were let down by private insurance, not Medicare or Medicaid. Ten million of them will incur medical costs they can't pay off each year, thanks to high-deductible plans.

How did those with insurance wind up with so many bills? Before the ACA, many were sunk by annual and lifetime limits. Others were stuck when insurance companies denied claims or just canceled the policy once they got sick.

But even after Obamacare, many weren't prepared for high deductibles and co-insurance payments. In 2017, 31 percent of the insured found it difficult to afford copay's. That's up from 24 percent in 2015, according to a Kaiser Family Foundation study. Similarly, 43 percent found deductibles too high, compared to 34 percent in 2015.

Waste

Thirty percent of health care spending goes to waste. Unnecessary services, such as over prescribing antibiotics, wastes $210 billion each year. Administrative costs for paperwork adds $190 billion. The billing staff must process different claims for each of the hundreds of different insurance plans.

Some of this is improper payments from Medicare, Medicaid, and the Children's Health Insurance Program. Although huge amounts, they are small percentages of the program's budgets.

It’s long been hard for health-care consumers to learn how much doctor visits or hospital stays will cost them. That’s now beginning to change, as a growing array of Web sites try to lift the veil on pricing. Costs of Health Care Case Paper

The online resources come from insurers, government agencies, Internet companies and medical-care providers. The sites aren’t perfect: Unlike online retailers that sell products such as televisions, the health sites can’t typically give exact prices for medical procedures and services. Still, consumers can get a rough idea of typical costs in their area, and that can help them choose doctors and hospitals, budget for medical costs and sort out disputed bills.

The mystery surrounding health-care pricing stems partly from the fact that hospitals and other providers generally don’t publicize how much they’re paid for services, which varies depending on who’s footing the bill. Insurers, which often contract to receive lower prices for their customers, also have traditionally not revealed these negotiated amounts.

But soaring health-care costs have made consumers more conscious of price. Even consumers with health insurance increasingly find that they have a stake in the cost of their care because they’re paying a far bigger share out of their own pockets. For instance, more than half of workers pay a percentage of the price of outpatient surgery and hospital admissions, rather than just flat co payments.

Consumers also can’t rely on their health plan’s contracts to always deliver the lowest price, because the same insurer might pay widely varying amounts to different care providers. In Maine, one insurer’s preferred-provider organization has paid between $559 and $4,526 for a colonoscopy in a given year, including the portion due from patients, according to data compiled by the state.

To find useful information, you’ll generally have to do some digging and check multiple sites. Each takes a different approach, and they can be confusing. Several sites, including some offered by hospital associations, use listed charges—the “sticker prices” that are typically much more than insurers pay. Other sites focus on the rates paid by private insurance plans or Medicare. It’s also often unclear whether a Web site’s estimate represents the full cost of a procedure, including, for instance, anesthesiology fees. Costs of Health Care Case Paper

Consumers also should pay attention to the quality of care, by seeking personal references or checking Web sites such as Medicare’s Hospital Compare.hhs.gov and Leap frog Group.org.

If you’re insured, a good place to start your research is your health plan. The big national insurers, including Well Point, United Health Group Inc., Humans Inc., Aetna Inc. and Cigna Corp., offer pricing tools to their customers, which the companies are continuing to enhance. Still, insurance company data don’t include all health-care providers or procedures, and they typically only give price ranges. Also, of course, you won’t be able to directly access the information if you aren’t a client.

A few states, including New Hampshire, Maine, Oregon and Massachusetts, have started providing pricing information based on databases of insurance claims, which give a detailed picture of costs. Other states, including Utah, Vermont and Tennessee, are building similar databases. And some nonprofits, such as MN Community Measurement in Minnesota, are also offering state-focused pricing information based on insurer data.

Several Internet companies now operate sites that let consumers around the U.S. search for pricing in their area. Health care Blue Book.com offers a suggested “fair price” for a service, based on a database of rates paid by private insurers, according to parent company Care Operative LLC.

Change health care.com, a unit of change:healthcare Inc., provides estimates of how much individual providers are paid by insurers, based on claims data from health plans. And New Choice Health.com gives providers list prices, which are derived from Medicare data, according to New Choice Health Inc. Another site, Out Of Pocket.com, has a search service to help users find online pricing information listed on various sites. Costs of Health Care Case Paper

You can also check for prices posted by specific hospitals and doctors. These are still relatively rare, and may represent list charges. But a few hospitals are also revealing roughly what they’re paid by insurers or offering calculators so insured patients can figure their out-of-pocket fees. A site called Price Doc.com seeks to aggregate listings from doctors.

Medicare data can also be a useful resource, though hard to find in a consumer-friendly format. A few savvy consumers use an American Medical Association Web site to look up what the federal program pays doctors for that type of care, then use that as a starting point in seeking a good price.

Once you’ve done your online financial due diligence, you should discuss prices with medical practices or hospitals before going in for any treatment. If you’re not insured, or going out of your health plan’s network, and want to negotiate, you can start by aiming for the Medicare rate or something close to what commercial insurers pay, though you may not be able to get to that price point. You may get a better deal if you are willing to pay cash up front.

In the United States, the amount of money spent on health care by all sources, including government, private employers, and individuals, is approximately $7,500 a year per person. In other advanced industrial nations, such as Germany, the bill is roughly one-third less. Yet scores on health care quality measures in the United States are not generally higher than in other wealthy countries and compare poorly on multiple measures. Nor is higher spending buying greater user satisfaction, as chronically ill U.S. patients, who are in most frequent need of care, are generally less satisfied with their care than are their counterparts in other wealthy countries.

This picture can be changed. As the Institute of Medicine’s Round table on Evidence-Based Medicine has found through a series of three workshops, there is substantial evidence that the United States can attain better health with less money. Compared with other wealthy nations, the United States higher levels of health care spending are primarily attributable to higher prices for products and services rather than to higher service volumes. Nonetheless, opportunities exist to lower both volume and unit price of services without jeopardizing quality. Some methods for cutting excess costs are incorporated into one or another of the health care reform plans that have been proposed by both political parties. But no plan takes full advantage of the range of cost-cutting tools and enabling public policies that the round table estimates would lower per capita health care spending by double-digit percentages while protecting or raising quality of care. Costs of Health Care Case Paper

Though the need for change cannot be overstated, trends have been running in the wrong direction. Unsustainable growth in U.S. health care spending—growth in spending on health care in excess of the growth in gross domestic product—out-paced other industrialized nations by 30% from 2000 to 2006, without evidence of a proportionally higher health dividend. Such excess growth is crowding out other spending priorities of federal and state governments and of employers. For example, although education is key to maintaining the nation’s standard of living in an increasingly competitive world, average state spending on Medicaid recently eclipsed state spending on public education. In the private sector, rapid growth in health care spending is suppressing growth in wages, employment, and corporate global competitiveness.

Rising health care costs also wreck havoc among non-affluent Americans who do not qualify for Medicaid or assistance through the Children’s Health Insurance Program. A recent Kaiser Family Foundation poll found that 53% of respondents reported their family decreased use of medical care in the past 12 months because of cost concerns. In addition, 19% reported serious financial problems due to medical bills, 13% had depleted all or most of their savings, and 7% were unable to pay for basic necessities such as food, housing, or heat.

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Fixing this situation will require the U.S. health industry to more rapidly develop and adopt innovations that improve value without lowering quality of care or slowing biomedical progress. In essence, it must become a learning health care system, drawing continuously on insights from outcomes research and internal organizational performance assessment to more rapidly improve. What new public policies would enable our health care system to meet the implied annual productivity goal of generating more health with fewer dollars?

Inventory of wasted spending

There are five broad categories of waste in health care: providing services that are unlikely to improve health, using inefficient methods to deliver useful services, charging noncompetitive prices for services and products, inducing or incurring excess administrative costs in the health care and health insurance sectors, and missing opportunities to lower net spending via illness and injury prevention. Collectively, these streams of embedded waste represent a double-digit percentage opportunity to reduce per capita health care spending while improving clinical outcomes and patients experience of their care. Estimates of savings from policies to address them are included in an upcoming round table report.

Among illustrative problems, it is estimated that more than 3 million preventable serious adverse events occur in hospitals annually, with over half attributable to hospital-acquired infections and adverse drug events. Conservatively estimated, avoiding preventable defects in hospital care can produce net annual savings of $16.6 billion.

Medical imaging is ripe for waste reduction. Although extremely beneficial in a growing number of clinical circumstances, imaging too often is used in cases where it’s likely to add no clinical value and to harm patients by radiation exposure—a fact rarely discussed with patients. As an illustration of the short-term gains possible, at Virginia Mason Medical Center, which operates in a market with a long-standing tradition of efficient use of health care services, physicians treating patients with back pain recently achieved a 30% reduction in MRI use while speeding patients recoveries. Costs of Health Care Case Paper

As with imaging, almost all service categories are marked by excess use, as when laboratory tests are performed without a clinical rationale. Some of these tests lead to further tests, such as cardiac characterizations, that carry substantial risk of serious complications. What causes excess use of services? Failure to rapidly access prior medical records is one prominent cause. For example, it is estimated that $8.2 billion in annual spending is due to duplicative testing in hospitals, most often because physicians cannot readily obtain prior test results. Another source is that hospitals in some areas have too many beds and too many affiliated medical specialists who, in turn, are more inclined to order services of unproven value in order to fill available capacity. This phenomenon is demonstrated in studies where large variations in service use relative to population size and illness occur among hospitals in the same metropolitan area.

Health service and product prices that are not determined by robust market competition cause substantial wasted spending. In one study, introducing competitive bidding for durable medical equipment, such as wheelchairs and oxygen equipment, lowered prices offered to Medicare by more than 25% for many of the products. Mergers among insurers, among hospitals, and among physician groups—a growing trend—more often than not boost prices due to monopoly or oligopoly pricing power. Noncompetitive pricing resulting from hospital mergers is now estimated to account for approximately 0.5% of annual health care spending.

Administrative waste imposes excess direct and indirect costs on health care consumers, clinicians, and health plans alike. Patients waste time in repetitious completion of paper forms or in waiting for doctors with poorly managed schedules. This, in turn, lowers U.S. workforce productivity. Health system productivity losses accrue from the excessive time that physicians and their staffs spend on valueless paperwork, much of it the result of a failure to standardize billing and insurance-related activities. These activities consume roughly 43 minutes a day per physician on average—more than three hours per week, or nearly three weeks per year—and the value of this time translates into approximately $31 billion per year nationwide. The amount of time that physicians and staff members spend on various administrative tasks results, in large measure, from requirements imposed by third-party payers, often insurance companies. But variation in payers requirements of providers has been shown to add little or nothing to health care value. Indeed, roughly $26 billion of the total spent annually on administrative costs is attributable to differences in payer billing rules that do not add any value, according to estimates by the Massachusetts General Hospital Physicians Organization.

These examples illustrate the diversity and magnitude of waste that could be trimmed without loss of health or reductions in the quality of patients experience of their care. Fortunately, there is an extensive inventory of tools available for trimming this waste.

A healthy nation they say is a wealthy nation. Healthcare is important to the society because people get ill, accidents and emergencies do arise and the hospitals are needed to diagnose, treat and manage different types of ailments and diseases. Many of people’s aspirations and desires cannot be met without longer, healthier, happy lives. The healthcare industry is divided into several areas in order to meet the health needs of individuals and the population at large. All over the world, the healthcare industry would continue to thrive and grow as long as man exists hence forming an enormous part of any country’s economy.

Healthcare is defined as the diagnosis, treatment, prevention and management of disease, illness, injury, and the preservation of physical and mental well-being in humans. Healthcare services are delivered by medical practitioners and allied health professionals (http://en.wikipedia.org/wiki/Health_care).

The National Health Service (NHS) is the provider of healthcare to all permanent residents in England. The services provided by the NHS are free at the point of use and paid for from general taxation. Although, there are charges associated with other aspects of healthcare such as eye tests, dental care, prescriptions, and many other aspects of personal care. The NHS is guided by series of policies as outlined by the Department of Health from time to time. All Health policy in England and the rest of the UK rests on the National Health Service Act of 1946 which came into effect on 5th July 1948, launched by Minister of Health, Aneurin Bevan during the opening of Park Hospital in Manchester. Costs of Health Care Case Paper

In this write-up, I would be analyzing healthcare policy, provision and funding in England. I would also assess and evaluate the impact that culture and the society has on healthcare as well as the people’s attitude towards healthcare.

The role of public health and health promotion in the provision of healthcare services can not be over emphasized. I would also assess national and international sociology-political issues in the promotion of public health, an analysis of the impact of international campaigns and national policies on the demand for healthcare would be done. I would also evaluate the role of health promotion in determining healthcare service demand in England.

Contemporary issues affecting healthcare in England would be identified and an evaluation of their impact on national and international policy as well as practical responses to these issues would be done.

The World Health Organization (WHO) defines health policy as decisions, plans, and actions that are undertaken to achieve specific health care goals within a society. The aim of health care policies is to define a vision for the future which in-turn helps to establish targets and points of reference for the short and medium term. It also outlines priorities and the expected roles of different groups; and it builds consensus and informs people.

Policy governs and informs the planning and implementation of both strategies and projects, and provides a framework for the professional development of the workforce (Porter and Coles, 2011). However, polices can take on different forms and may be communicated in different ways.

Culture is a way of life; it is the way we do things. It is defined as the way of life of a particular society or group of people; it includes the patterns of thought, beliefs, behaviour, customs, traditions, rituals, dress, language, art, music, as well as literature (Webster’s New World Encyclopedia, 1992). Costs of Health Care Case Paper

Culture as defined by dictionary.com is the behaviors and beliefs characteristic of a particular social, ethnic, or age group. It is a group’s shared set of beliefs, norms, and values.

The cultural differences and way of life of people have a great impact on the way they assess their health and well-being as well as their attitude towards healthcare. It affects their attitude and understanding of the cause of an illness and how to manage them as well as the consequences of medication and medical treatments. This also has an effect on people’s expectations on healthcare delivery.

There are diverse groups of people living in England as a result of migration and they are diverse in the fact that they are of different age, sex, gender, race, ethnic background, colour, religion, beliefs as well as cultural background. It is important for health and social care practitioners to understand and cope with all these differences as it affects the way people react to healthcare provision.

In England, every resident have access to free healthcare provided by the NHS. However, people can still go to private hospitals if they wish to but they have to pay for the medical services they receive by themselves or by their health insurer.

For religious reasons people also have different beliefs and how they perceive healthcare delivery and sometimes how they react to medical practitioners. For instance, Muslim women do not allow male medical practitioners to attend to them especially when it has to do with the exposure of their private parts. Jehovah’s witnesses do not consent to the use of blood transfusion.

Using the PEST analysis, I will be assessing how several factors have influenced people’s attitude towards healthcare in England.

Political factors: a new government with new agenda and mission to fulfil their manifestos pass new laws about health and health reforms. With the government of the day wanting to cut cost; so many benefits of the citizens has been drastically reduced. These include a cut in energy allowance for the elderly, cut in healthcare allowance and so on.

Economic factors: the global economic downturn has made the government of the day to cut cost and introduce policies and agenda which has made people loss job and become unemployed. How well the government of the day react to these issues will determine the extent to which the health and well-being of its entire populations are protected. During these times, some people may become depressed, and become mentally ill.

Social factors (inequalities, discrimination): for instance, when people become depressed and mentally ill during recession, they become discriminated upon by colleagues, friends and sometimes close family members. The loss of a job too makes people to socialize less often and prefer to live in isolation most times and this can have a great impact on their health. Costs of Health Care Case Paper

Technological advancement: this has drastically affected healthcare delivery in recent times. Diagnosis and treatment of diseases with the use of technological equipment have gone a long way in making things easier and faster for healthcare professionals and the patients as well. Treatment can be done faster and accurately too. For instance, the use of radiotherapy in the treatment and control of cancer. However, such treatments are sometimes rejected by the patient due because of the after effects it will have on them. A recent example is Sally Roberts who resisted radiotherapy being done on her son who has brain tumor (the guardian news UK).

Environmental factors: a change in the weather e.g. snow, heavy rainfall and flooding also affect people’s attitude and spending towards healthcare. Many become very ill, catching a cold, having flu and fever in cold temperatures, making them to visit their local G.Ps more frequently, and spending more on medication as well. The government tend to spend more and healthcare professionals tend to be more engaged during these periods. Emergency services work round the clock saving people.

HISTORY OF THE NHS

Healthcare in England would not be complete without taking a look at NHS, its history and how it has evolved over time. NHS is the major provider of healthcare in England as earlier mentioned in the introduction. For this purpose of this assignment, I would be analyzing only the major events that happened in the NHS decade by decade.

The Second World War ended in 1945 leaving many soldiers dead and lots wounded who needed quality healthcare and some suffering from post war depression and all other kinds of ailments and diseases. Right after the war, there was heavy storm and flooding in the following year causing destruction, industrial and economic breakdown. With no money to spend on proper and balanced diet, people are left with malnutrition and became prone to various infectious diseases and so on.

This led to the government wanting to create a system whereby good healthcare can be available to all regardless of wealth and to bring all healthcare professionals under one umbrella, hence the creation of the NHS. Before the start of NHS, access to healthcare in England was funded by each individual that needs healthcare services. There are also fewer hospitals and fewer Doctors. Costs of Health Care Case Paper

After the creation of the NHS in 1948, there have been lots of innovations, inventions and discoveries through the use of research.

In the early 1950s, one shilling (5p) and £1 respectively for prescription charges and dental treatment was introduced, however the prescription charges was abolished in 1965 and later re-introduced in 1968. This was followed shortly by the revelation of the DNA (oligonucleotide acid) structure by two scientists, James D. Watson and Francis Crick. The DNA is a material that makes up the gene and passes hereditary characteristics from parent to child. This allows the study of diseases caused by defective genes, hence allowing doctors and clinicians to easily identify diseases and know how to treat them on time without wasting money and resources. It also helps in the prevention of hereditary diseases.

In the mid 50s, Sir Richard Doll published his finding of a research he carried out in the 40s about the link between smoking and cancer. He was able to found out that smokers are more likely to die of lung cancer than non-smokers. Shortly after, there was an introduction of daily hospital visits for children because before then, parents were only allowed to visit their kids for one hour each on Saturdays and Sundays.

By 1958, polio and diphtheria vaccinations were launched as there has been an epidemic just before that year. The vaccination program mes ensures that children of 15years and below were vaccinated; leading to an immediate and dramatic reduction in the diseases. Hence, the promotion of good health by the NHS and not only the treatment of illnesses and diseases. This however formed a good part of the NHS plan.

In the 60s, contraceptive pill was made widely available, initially to married women, but this is relaxed in 1967. The pill suppresses fertility with either progesterone or o estrogen or a combination of both and it plays a major role in women’s liberation and contributes to the sexual freedom of the so-called Swinging Sixties.

A report (Porritt Report) was published in 1962, which results in Enoch Powell's Hospital Plan. The medical profession calls for unification of the NHS after criticizing its separation into – hospitals, general practice and local health authorities. The Hospital Plan approves the development of district general hospitals for population areas of about 125,000. The 10-year program me is new territory for the NHS and it soon becomes clear that it has underestimated the cost and time taken to build new hospitals. But with the advent of postgraduate centers, nurses and doctors will be given a better future.

In the same year, the first hip replacement was carried out by Professor John Charnley in Wrightington Hospital.

The Salmon Report was published in 1967. It sets out recommendations for the development of senior nursing staff and the status of the profession in hospital management. The Cogwheel Report considers the organization of doctors in hospitals and proposes specialty groupings. It also highlights the efforts being made to reduce the disadvantages of the three-part NHS structure – hospitals, general practice and local health authorities – acknowledging the complexity of the NHS and the importance of change to meet future needs ad demands. Costs of Health Care Case Paper

The Abortion Act was introduced by Liberal MP David Steel and is passed on a free vote, becoming law on April 27 1968. This new act makes abortion legal up to 28 weeks if carried out by a registered physician and if two other doctors agree that the termination is in the best mental and physical interests of the woman. In 1990, the time limit is lowered to 24 weeks.

On the 2nd of October 1968, a British woman gave birth to sextuplet after receiving fertility treatment. In the same year,

In 1972, Computer tomography, CT scans was introduced and it transformed the way doctors examine the human body. Since that initial invention, CT scanners have developed enormously, but the principle remains the same. By 1975, the morphine-like chemicals in the brain called endorphins are discovered.

Another major discovery of the 70s was the world’s first test-tube baby, Louise Brown, who was born on July 25th, 1978 as a result of in-vitro fertilization. This new technique developed by Dr Patrick Steptoe, a gynaecologist at Oldham General Hospital, and Dr Robert Edwards, a physiologist at Cambridge University found a way to fertilize the egg outside the woman’s body before replacing it in the womb. Shortly afterwards in 1979, the first successful bone marrow transplant on a child takes place. The operation was performed by Professor Roland Levinsky at the Great Ormond Street Hospital for Children.

Magnetic resonance imaging- MRI scans was introduced in the 80s using a combination of magnetism and radio frequency waves, MRI scanners provides more information about the body e.g. prove more effective in providing information about soft tissues, such as scans of the brain. It provides very detailed pictures, so is particularly useful for finding tumors in the brain; it can also identify conditions such as multiple sclerosis and the extent of damage following a stroke.

The first keyhole surgery was performed by using a telescopic rod with fiber optic cable to remove gallbladder.

The Black Report aimed to investigate the inequalities of healthcare i.e. differences between the social classes in the usage of medical services, infant mortality rates and life expectancy. Poor people are still more likely to die earlier than rich ones. The report was commissioned by David Ennals, then secretary of state. The Whitehead Report in 1987 and the Acheson report in 1998 reached the same conclusions as the Black Report.

The 1981 Census shows that 11 babies in every 1,000 die before the age of one. In 1900 this figure was 160. Childhood survival has been revolutionized by vaccination program mes, better sanitation and improved standards of living, resulting in better health of both mother and child. Increased numbers of births in hospital has meant that where unexpected problems do occur, medical help is on hand.

In 1986 the government launched the biggest public health campaign in history to educate people about the threat of Aids as a result of HIV. This was very much in keeping with the NHS’s original concept that it should improve health and prevent disease, rather than just offer treatment. In the following year, the first heart, lung, and liver transplant was carried out at Pap worth Hospital in Cambridge by Professor Sir Roy Calne and Professor John Wall work. Costs of Health Care Case Paper

A comprehensive national breast-screening program-me was introduced in 1988 in order to reduce breast cancer deaths in women over 50. This project is launched with breast-screening units around the country providing mammograms that takes an X-ray of each breast, which can show changes in tissue that might be otherwise undetectable. This means that any abnormalities show up as early as possible, making treatment more effective.

NHS and Community Care Act was introduced in 1990 and the first trust established in 1991. This means health authorities manage their own budgets and organizations will become NHS Trusts, that is, independent organizations with their own managements. The aim is to encourage creativity and innovation and challenge the domination of the hospitals within a health service that is increasingly focused on services in the community.

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National register for organ donation was set up in 1994 to co-ordinate supply and demand after a five-year campaign. Organ donation is needed as demand outstrips supply and this register ensures that when a person dies they can be identified as someone who has chosen to donate their organs.

NHS Direct, a nurse-led advice service which provides people with 24-hour health advice over the phone was launched. It is the start of a growing range of convenient alternatives to traditional GP services – including the launch of NHS walk-in centers, which offer patients treatment and advice for a range of injuries and illnesses without the need to make an appointment.

The NHS walk-in centers was established in year 2000 to offer convenient access, round-the-clock, 365 days a year and are managed by Primary Care Trusts. The services are available to everyone without making an appointment or requiring patients to register.

In 2002, Primary care trusts are set up to improve the administration and delivery of healthcare at a local level. The primary care trusts oversee 29,000 GPs and 21,000 NHS dentists. The trusts are in charge of vaccination administration and control of epidemics also control 80 per cent of the total NHS budget. They also liaise with the private sector when contracting out of services is required. As local organizations, they are best positioned to understand the needs of their community, so they can make sure that the organizations providing health and social care services are working effectively.

In 2004, all patients waiting longer than six months for an operation are given a choice of an alternative place of treatment. Everyone who is referred by their doctor for hospital treatment is given a choice of at least four hospitals. Nowadays you can choose where and when to have your treatment from a list including local hospitals, NHS foundation trust hospitals across the country and a growing number of independent sector treatment centers and hospitals that have been contracted from the private sector. You can choose according to what matters most to you: waiting lists, MRSA rates, bus routes and so on. Costs of Health Care Case Paper

Robotic intervention was launched in 2007 with the aim to performing operations to treat patients for fast or irregular heartbeats.

Free choice is introduced on April 1 2008. Patients can choose from any hospital or clinic that meets NHS standards. Patients who are referred by their GP for their first consultant-led outpatient appointment can choose from any hospital or clinic that meets NHS standards. You can choose a hospital according to what matters most to you, whether it's location, waiting times, reputation, clinical performance, visiting policies, parking facilities or patient's comments.

On July 5 2008, the NHS celebrates its 60th birthday. Local events take place across the country, and NHS staff and patients celebrate at Westminster Abbey and 10 Downing Street.

HPV vaccination program me was launched a few months after the 60th anniversary of the NHS. The aim is to vaccinate girls aged 12 and 13 against the human papilloma virus (HPV) is launched to help prevent cervical cancer. A three-year catch-up campaign is also introduced, which will offer the HPV vaccine, also known as the cervical cancer jab, to girls who are 13 to 18 years old.

The NHS Constitution is published on January 21 2009 and sets out people’s rights as an NHS patient. For the first time in the history of the NHS, the Constitution brings together details of what staff, patients and the public can expect from the NHS. It aims to ensure the NHS will always do what it was set up to do in 1948: provide high-quality healthcare that's free and for everyone. Also, the New Horizons program me was launched to improve adult mental health services in England followed by the launch of NHS Health Checks for adults in England between the ages of 40 and 74. Primary care trusts begin implementing the NHS Health Check program me in April 2009. It has the potential to prevent an average of 1,600 heart attacks and strokes and save up to 650 lives each year. It could prevent over 4,000 people a year from developing diabetes and detect at least 20,000 cases of diabetes or kidney disease earlier, allowing people to manage their condition better and improving their quality of life. Costs of Health Care Case Paper

In 1942, the Beveridge report was introduced, which stated the fundamentals required for the application of the modern welfare state in the United Kingdom. Implemented by the Labor administration in 1948, schemes included the establishment of a National Health Service and the National Insurance system. The driving force of such initiatives was based on the ideology that the state should safeguard the health of all its citizens, particularly those with sociology-economic needs, in the form of grants, pensions and other benefits (Greener, 2009).

The last few decades have experienced extraordinary growth in healthcare disbursements, internationally (Cohen, 2008). The UK demonstrates the scale of this increase quite evidently: in 1973, £3, 3634 million, encompassing both private and public healthcare, was spent on healthcare, an equivalent of £60 per person; however, by 2005, there was an almost 40-fold increase. Logically, in context, with the overall economic growth, throughout this period of time, an increase in expenditure on health care would be expected. However, this increase in spending has not been justified, as it has not been supplemented by a parallel decrease in demands on the healthcare systems (Cohen, 2008). These trends demonstrate that the availability of resources is unlikely to meet healthcare needs in order to maximize the quality of care to be delivered, resulting in necessary choices being made concerning the resources that are available (Powell, 2008).

Health economics

Present day competition between the NHS, voluntary and private sectors are quite evident. The debates surrounding the future of the NHS, and what the impact will be on future privatization of the healthcare system in the UK has been intensifying (Pee dell, 2011). The main concerns, in regards to the implementation of a privatized healthcare system and the eradication of the welfare state, have been contentious among st governmental bodies and members of the public (Gubb&Meller-Herbert 2009). Many argue from an economical and moral viewpoint that healthcare, with its upfront costs and significance to humankind should be left outside the domains of the normal markets. However, an alternative viewpoint is that in doing so, ignores valid reasons and bypasses possible values of a healthcare system being included within the domains of the market (Gubb&Meller-Herbert 2009). Policymakers in healthcare are faced with a pivotal challenge: to obtain an optimum balance between available markets and the alternatives. The markets can deliver real benefits, however, these can are totally dependent  on an environment that is not only committed to allowing progression, but is also well regulated, accounting for any market failures that may take place (Powell & Miller 2013).  Costs of Health Care Case Paper

Globally, the most successful health systems demonstrate certain key areas that are required. Among these key areas are aspects such as: the presence of a political sector that can account for the exit of an inadequate or unnecessary service out of the market, and provide entry for improved choices. Additionally, information concerning the quality of care, cost and activity must be adequate and available to investors providing a free and transparent market, which allows them to seek alternative providers in the case of poor service delivery (Powell & Miller, 2013). Other vital features contributing to a successful healthcare system, include being able to respond to the market force, abiding by regulatory frameworks, ensuring minimum standards of quality and finance are met, and that capital markets can be retained (Gubb & Meller-Herbert 2009).

The reforms in the NHS over the last few years have been harnessed to reap the benefits of a successful market as described above, however challenging. Difficulties have arisen because the government still holds considerable control of funds raised through general taxes; moreover, other influences such as culture, regulatory frameworks, providers, competitive tendering and commissioning all impact on the success of the current reforms in the NHS (Powell & Miller 2013).

  • Market driven health care

The complexities associated with the delivery of care in a hospital environment are further complicated when an economic perspective of ‘resource use is applied (Douglas et al., 2001). As a behavioral science, economics utilizes human behaviour as an underlying concept in order to understand how resources and demands can be met. It is an established fact that human behaviour is subjectively orientated and directed; thus an individual acts to promote their own interests. When this is accompanied by the need to fulfill unlimited human desires and demands, added to working with a limited availability of resources, these unlimited demands cannot be adequately be met (Greener, 2009). Thus a frequent problem faced by economists is to find a solution to unlimited demands with finite resources.  A social mechanism to distribute these resources among st society needs to be installed, providing a platform that will allow for the implementation of the greatest output from the productive inputs available.

It is extremely complex to view healthcare as a product or service, and thus determining its “market “value is one that is associated with many problems , due to the nature of this resource. The anticipated outcome, which cannot be assured, is dependent on many uncontrollable factors that are beyond the scope of the healthcare provider (Douglas et al., 2001). However, one can still adopt an economic analysis based on the central concept of the effective use of available resources. There are two basic premises which must be considered: firstly, to acknowledge that economics concerns resource allocation, and, secondly that effective use of available resources will be of paramount importance in resource use. In healthcare, this can be further realized by recognizing the representatives of healthcare providers (Pee dell, 2011).

The Gold standard of Resource allocation

A vital aspect of health economics is based on the understanding of the social conditions that affect resource allocation (Douglas et al., 2001). The “gold standard” is used in economics viewing the market as one that is “perfectly competitive”, it encompasses the following characteristics: that there are many buyers and sellers prompting the exchange of goods among market contenders ; a uniform product cannot be altered, (thus preventing individual producers from differentiating or altering the product to obtain a higher price); an absence of barriers, sustaining fluid movement into or out of the markets; the availability of perfect information and market conditions to all market contestants and finally a demarcated system of all property rights and tenures (Cohen, 2008).  Costs of Health Care Case Paper

This approach to market fairness and equality allows both consumers and producers to interact, allowing for any preferences concerning products to be revealed.  However, in spite of these standards accounting for various aspects of the interactions that are required in successful resource allocation, the pathway is not as straightforward when applied to the healthcare sector (Popper et al., 2006). The assessment of resource allocation in the healthcare sector is one associated with complexities, as market features differ from those in a “perfectly competitive” market. Considered as an imperfect market, one must comprehend how the patients (consumers), healthcare providers (suppliers), and insurance companies (third party payers) perspectives will contrast to those of the consumers and producers in a competitive market (Douglas et al., 2001).

The primary concern in maintaining competence in resource use is an objective that all healthcare organizations should accept, irrespective of what the societal, political, insurer or patient's viewpoints is; thus, it is essential to maximize the use of available resources.  Economics is primarily concerned with resource use, therefore, it can offer great assistance in healthcare decision making; although, new approaches to analysis are required when economics and healthcare are involved (Douglas et al., 2001).  Costs of Health Care Case Paper

Privatization of healthcare in the UK 

Viewing healthcare from an economical perspective gives rise to concepts such as “privatization”; a complex phenomenon which encompasses an array of ideas spanning law, politics, economics, and philosophy. The World Health Organization defines privatization in healthcare as “a process in which non-governmental actors, become increasingly involved in the financing and /or provision of healthcare services” (Maarse, 2006). It is essential to understand and grasp the concept that healthcare markets differ in numerous ways from competitive markets; each individual is provided with a slightly different product, the product is thus differentiated rendering total information as imperfect (Propper et al., 2006).

The perspectives of the different stakeholders in the “privatization” of the National Health Service (NHS) in the United Kingdom vary considerably; principally, publically funded, it is a “public health service” (Maarse, 2006). However, it is also regarded by some individuals as a global “leader” in privatization (Pollock, 2005). This raises the question of how the term “privatization” is defined among st these commentators. In 1986 Dunleavy defined privatization as “strictly, the permanent reassigning of services and goods production, formerly carried out by public service bureaucracies to private firms or to other forms of non-public bodies” (Powell & Miller 2013).  However, others view this term from a wider perspective and claim that it involves a decrease in state activity in one = area of subsidy, provision and regulation (Le Grand & Robinson, 1984).

In 2006, Maarse analyses privatization from four different standpoints: management and operations, provisions, financing and investment (Powell & Miller 2013). Conversely, the sixteen cell-model proposed by Pollock and Miller, provides a three-dimensional perspective that examines the movements that take place between origin and destination cells, in this model. The initiative behind the implementation of such a model was to provide an insight into privatization in a mixed economy of welfare (MEW) (Powell 2008).

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It has been repeatedly claimed by various governmental bodies, inclusive of the Prime Minister, David Cameron, and the Health Secretary, Andrew Lansey, in response to widespread criticism, that privatization of the NHS will not take place in England (BMJ 2009).  This was further reinstated by the Department of Health which stated that, “Health Ministers have said they will never privatize the NHS”.  The evidence, however, does not fully support these proposed claims of non-privatization, as it seems that due to the policies contained in the Health and Social Care Bill, privatization shall be an inevitable consequence (Pee dell, 2011).  Costs of Health Care Case Paper

Conclusion 

In spite of the concept of privatization being made “official” in areas such as utilities, no British government has clearly stated that they wish for the “privatization of the National Health Service”. However, previous governments such as the Conservatives (1979-1997) and Lab our (1997-2010), have displayed greater support for the private sector (Gubb & Meller-Herbert, 2009). In a parliamentary debate on the new Health and Social Care Act (House of Common, 2012), various issues surrounding the privatization of healthcare were raised. It was stated by certain members that “there is a crucial role for the private sector in supporting the delivery of NHS care”; although, concerns with opening up the NHS as a regulated market, and thus encouraging private-sector involvement were also highlighted (Powell & Miller 2013). Critics maintain that a greater private involvement involves the risk of putting profits before the interest of the NHS patients, encouraging resultant conflicts of interest between shareholders and patients (Powell & Miller 2013).

There are many factors contributing to the delivery of the quality of healthcare received by patients. An example, include epidemiology units in hospitals play an essential role in ensuring that precise and accurate information is recorded. These units contribute to understanding the uses and demands of resources and hence the economic impact of caring for the patients (Douglas et al., 2001). The overall focus of health economics is based on finding the most practical and coherent ways to assign scarce resources to healthcare services. Therefore, in times when the availability of resources does not match the demands of healthcare needs, priority setting is important. Moreover, using economics in this way allows for the provision of frameworks that account for broad policy level decisions and individual treatment decisions to be made (Cohen, 2008). Costs of Health Care Case Paper